Alex Tolbert: Five things to know about the health exchange

Oct. 6, 2013

Open enrollment will last until March 31, so there is still plenty of time for health care consumers to explore whether they can save with the new plans, or apply for private coverage for the first time without the risk of being declined.

Written by

Alex Tolbert

For The Tennessean

Tuesday was one of the biggest days in the history of health care in the United States.

It marked the opening of the health insurance exchanges, including Tennessee’s, which is run by the federal government. The opening was clouded by the government shutdown and technical glitches that prevented many from being able to use the exchange website. Open enrollment will last until March 31, though, so there is still plenty of time for health care consumers to explore whether they can save with the new plans, or apply for private coverage for the first time without the risk of being declined.

Part of the idea of the exchange is to make it easier to sign up for coverage. Health insurance is super complicated, though, so don’t be surprised if you find yourself getting frustrated while trying to choose a plan.

With that in mind, here are five things to consider when signing up:

1. The marketplace and the exchange are one in the same. The government originally called the place where insurance would be bought and sold an “exchange.” Then it called it a “marketplace.” If you have been referring to it as an “exchange,” don’t be confused when you go to healthcare.gov and see the word “marketplace.” It’s the same thing.

2. BlueCross’s new Network E is only available on the marketplace. Created solely in anticipation of the influx of people signing up under reform, Network E plans include Saint Thomas but don’t include Vanderbilt or HCA hospitals. As a result, Network E plans are the most affordable. However, the only place you can sign up for Network E is on the marketplace. Small employers still utilizing a group plan are not able to offer this option to their employees, and you can’t sign up for it as an individual off of the marketplace.

3. Baptist Hospital is the same as Saint Thomas. You might have noticed the billboards around town declaring this fact, but what you may not know is the two have been part of the same hospital system for years. This is just the first time they have been marketed as one unit. Many believe part of the reason they are clarifying this is so people don’t avoid Network E because of mistakenly thinking that “Baptist” is not in-network with Network E.

4. Subsidies are only available when health insurance is purchased on the marketplace. Middle-income individuals who are not eligible for qualified coverage through their employer can apply for a subsidy through the marketplace. How much would the subsidy be? We can get an idea from the Kaiser Family Foundation’s subsidy calculator. For a 40-year-old single adult in Tennessee making $20,000 per year, Kaiser projects a subsidy of $746 to offset the annual cost of health insurance (projected at $1,768). For a 40-year-old with a family of four making $60,000, Kaiser projects a subsidy of $867 toward an annual premium of $5,780.

5. Platinum isn't always better than bronze. In fact, it’s difficult to come up with situations where a platinum plan would be better than a bronze plan.

Let’s take our 40-year-old, nonsmoker for example. The monthly premium for a bronze plan with a $5,300 deductible is $148.62. A platinum plan with a $1,500 deductible costs $473.99. Some might choose the platinum plan observing that it has a lower deductible than the bronze plan. But the premium difference between the two — $325.37 per month, or $3,904.44 per year — more than outweighs the difference in deductible. Why? Because if you pick the Bronze plan, you save $3,904.44 in premiums that you can use toward that higher deducible if you need to. If you don’t, you keep the difference and can spend the savings on things that are more fun than health insurance.

There are other considerations that could make a platinum plan right for you, but take some time to really run the numbers and understand what you are getting.

The new exchanges, while not perfect, give consumers a huge opportunity to save on health care. Whether you qualify for a subsidy or not, all the new options make it worthwhile to explore if there is something out there that is a better value for you and your family.

Alex Tolbert is the founder of Bernard Health, a company that provides advice on health, Medicare and COBRA insurance. To learn more, visit www.bernardhealth.com/.